Michael Kors USA, Inc. has been giving its competitors a run for their money with its successful major growth within the past year. Its target market was mainly women from 30s to 40s. However, now due to all the expansions and line additions, the main new target begins with women young twenties to endless who are looking for the quality in a product and pieces to wear, not just everyday clothing. A smaller portion of the target market reaches out to men with the men's lines and accessories. Michael Kors marketing strategy has been very simple. MKUSA maintains its luxury brand and maintain its customer base by offering various product lines that reaches out to every class; the expensive high-quality Michael Kors and the relatively cheaper Michael line, and all other lines.
"A Michael Kors woman is a woman who celebrates her femininity."
Each store, in itself reaches out to the desired target market with its ambiance and glow but also stands back and allow each piece to sell itself. The neutral color balance of each store sort of enhances both the luxurious look and the quality of the clothing and/ or accessory. The merchandise are all individually showcased, portraying a more runway feel. Everyday there is more opportunity. With the brand being increasingly familiar to shoppers of the USA, the company has a greater chance at capturing more customers abroad as economies recover; thanks to the help of Mr. Kors, himself, participating in the hit TV show, Project Runway.
"The only way fashion comes to life is if someone wears it, and I don't think just wears it in a fashion show."
Critics look at Michael Kors and immediately think the company is prone for a ride straight downhill looking at how quickly its expanding. They say it will be another case like Tommy Hilfiger in the late 90s when customers started to abandon the brand, and like Kenneth Cole, who announced he was closing eight stores in a couple months. Michael Kors' stock has more than doubled in just 9 months and has among the best dept of equity, current ratio, EPS growth, and profit margin in the industry. Therefore, the company has indulged and is indulging in new areas such as: Rue Saint-Honoré, Paris (its largest store yet, 7,000 square-foot flagship), the first store in France, HongKong (only carrying the highest-priced line), boutique in Tokyo, subsidiary in Japan (products for stand-alone and department stores), and fifty stores in the greater part of China over the next three years. And that all adds mens' underwear and leathergoods, iPad and even travel and food to his whole empire. All the stores, other than the ones listed with specific lines, will have all the lines included because its convenient for everyone. He put it together perfectly, "let's be honest, the wealthy still need a flip flop", he says. Rue Saint-Honoré, Paris (its largest store yet, 7,000 square-foot flagship), the first store in France, HongKong (only carrying the highest-priced line), boutique in Tokyo, subsidiary in Japan (products for stand-alone and department stores), and fifty stores in the greater part of China over the next three years. And that all adds mens' underwear and leathergoods, iPad and even travel and food to his whole empire. All the stores, other than the ones listed with specific lines, will have all the lines included because its convenient for everyone. He put it together perfectly, "let's be honest, the wealthy still need a flip flop", he says.
“Anybody would be crazy not to invest in it. Michael Kors is the next major global player in my eyes.”
Key Sources: beta.fool.com , wall street journal , investors.com , observer.com Quotes by: Stefani Greenfield , Tommy Hilfiger
The company vision of Michael Kors has taken it from being an American luxury sportswear house to a global accessories, footwear and apparel company for both men and women in 74 different countries. Our products portfolio have been expanded, through several licensed agreements, with companies such as Fossil, Machron and Estée Lauder. With our mission of introducing the “jet-set, luxury lifestyle” to women and men all over the globe, we are striving to hold our brand, including our product, its technology and creativity, exemplary of the highest standard of quality.
SWOT Analysis
Strengths: Our design vision is led by the world renowned, award winning designer, Michael Kors. The solid foundation we built for continued long-term global prosperity and best-in-class growth metrics has our luxury lifestyle brand in rapid advancement. Michael Kors is the youngest man and company to receive the CFDA Women’s Fashion Designer of the Year Award, the CFDA Men’s Fashion Designer of the Year Award, the ACE Accessory Designer of the Year Award, and the CFDA Lifetime Achievement Award, along with other awards. We have the fastest growing accessory product category in the global luxury goods industry. Other strengths include: strong relationships with premier wholesale customers, growing license segment, and preparing to take share in the growing global accessory product category.
Weaknesses: Recessions in the general economy can greatly affect consumer spending habits which negatively affects purchases made towards the accessory, footwear and apparel industries. Profitability can decline in this highly competitive industry. Our competitors include, among others, Coach, Burberry, Ralph Lauren, Hermés, Louis Vuitton and Prada. Being a smaller company who is not as diversified as others, we will not be able withstand any periodic downturns to our accessory, apparel and footwear industries. Our products may not be innovative enough to meet the standards of the rapidly changing fashion and retail trends.
Oppotunity: Michael Kors will continue to increase brand awareness both in North America and internationally by opening more stores in predominant areas, semi-annual runway shows and growing our online advertising exposure. The retail store base will be expanding continuously both in North America and internationally as well as the wholesale business and comparable store sales.
Threats: The departure of our founder, executive management and key employees will have an unfavorable effect on the company as a whole. Being a part of the ever-changing fashion industry, creativity may not favor our company compared to our competitors.
Strategic Analysis
Michael Kors strategy make sure that every time a customer comes in contact with our brand through our visual merchandising and communications to receive a consistent message of our creative image and our creative marketing, thus, drawing the customer in.
Mission Statement
Michael Kors is the leading American fashion designer for luxury accessories and sportswear. The company's heritage is rooted in producing polished, sleek, sophisticated American sportswear with a jet-set attitude. Whether Aspen, Palm Beach or Capri, our mission is to bring our vision of a jet-set, luxury lifestyle to women and men around the globe. Our products, emblematic of the highest standard of quality, include apparel, accessories and beauty. Our lifestyle-driven company embraces the highest standards of creativity, quality, technology, and human resources.
Brief History
Growing up in a family who were obsessed with fashion, Michael Kors (born Karl Anderson) knew that the fashion world would be his destiny. Always going over-the-top with his sense of style and passion for the luxurious but trendy wear aided to his decision to become what he is today, along with his ability to produce an amazing piece of garment.
After receiving every form of fashion intelligence that he could possibly gather, Kors moved to the wonderful New York City to attend the Fashion Institute of Technology, also known as FIT. He landed a job at a French boutique called Lothar's on 57th Street, where his advanced skills granted him a chance at designing clothing for the store. Realizing that he loved the city more than school, he dropped out of FIT and went full-time at his job which soon became his career.
Kors' collection received enough positive interest that he was able to start his own fashion line at the age of 19. The Michael Kors Women's Collection launched in May 1981, and was sold at high-end department stores such as Bergdorf Goodman and Saks Fifth Avenue. Kors began traveling across the United States for small fashion shows in private homes, known as "trunk shows", showcasing his winning combination of simple, elegantly tailored clothing and his captivating, persuasive sales techniques. At the age of 23, he convinced the appalling fashion editor Anna Wintour, now the editor of Vogue magazine, to view his collection, displaying them on the bed in his apartment. With these humble beginnings, Kors began earning awards for his designs and picked up a couple celebrity fans while on the ladder to his success, like Barbara Walters.
Unfortunately, in 1990, the company took a fall and was forced to reorganize under Chapter 11 Bankruptcy. However, that didn't stop Kors from getting back on his feet, launching KORS by Michael Kors, a lower-priced line. Starting in 1997, he also held a six year position as the creative director of Celine, a French fashion house, while expanding his own brand, launching menswear, accessory and perfume lines. Winning the most prestigious prize in American fashion, the Menswear Designer of the Year award from the Council of Fashion Designers of America, Kors finally succeeded in bringing his company to one of the top levels of the fashion empire.
With a countless amount of celebrities wearing his garments, and new lines constantly in production, Kors' fashion dynasty continues to grow. Hitting his 30-year mark, Kors has turned out a strong set of collections that perfectly illustrate his vision of luxe American glamour.
